FlyGlobespan defends financial position

Irish gambling website PaddyPower is taking bets on which airline is next to go bust. Gamblers are putting their money on Flyglobespan, the Edinburgh-based airline, as the next airline to go bust.

Flyglobespan has written an open letter to the media in response.

Dear xxxxxx,

Having spoken with you in the past on airline matters, I feel it is only appropriate that I write this letter to you to explain the Globespan’s Group current position and outlook in what is a difficult time for the airline sector.

I am delighted to say that, despite some negative comments and innuendo in a weekend media story, the company and the airline are extremely well positioned to see through the well documented problems facing the industry at present.

Without delving into the specific reasons why there have been so many high-profile airline casualties of late, the common denominator seems to be one of debt and the manner in which that was dealt with – a problem further exacerbated in XL’s case as they had a huge MBO loan to service.

Flyglobespan has no such problems. We have no debt and in addition have substantial cash assets, built up over 30 years over successful trading as the Globespan Group.

We have significant property assets in the UK, France and Spain – and, most importantly, have a strong and powerful business model.

We have just enjoyed our best-ever summer with record load factors in the budget airline sector and a considerable increase in yield from last year.

As we enter the traditionally more difficult winter months for the travel industry, we have leased a number of our planes to other carriers in a multi-million pound exercise that will maximise our assets over the coming months.

This week another of our aircraft starts a leasing agreement with the Ministry of Defence flying regularly from Brize Norton to the Falklands.

These various leases add-up to multi-million revenue earners for the airline at a time when the industry generally incurs loses

As we look ahead to next year, our advanced sales are ahead of plan and we have already announced an expansion to our Aberdeen services as well as new routes from both Glasgow and Edinburgh.

I am not denying it has been a difficult time for the airline industry. The soaring price of airline fuel has led to some rapid re-evaluation of business plans but, despite these difficulties and a general economic slowdown, we have performed well and put last year’s problems firmly behind us.

But as we look to build on our summer successes, it would be wrong to ignore the public’s unease over the airline industry. That has been heightened by the negative rumours involving not just this airline but others.

I don't know who is trying to de-stabilise us by putting out these rumours - but they are wasting their time. Our customers, thankfully, are ignoring them as our planes are full and our advance bookings are very healthy. After last year's difficulties we will be back in profit this year - and very well positioned for the future.

I feel it is time to put a stop to this whispering campaign of negativity. Hence this personal letter to you which, I hope explains flyglobespan’s current position.

I hope too, that it reassures you that the airline about which you have written so positively in the past will continue to champion the cause of Scotland’s holidaymakers for many years to come.